Absolute priority

Definition:

Rule in bankruptcy proceedings requiring senior creditors to be paid in full before junior creditors receive any payment.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Overinvestment

In corporate finance, this refers to managers not acting in the best interests of the shareholders and investing too much (potentially in negative net present value projects).

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